United States v. Chung
659 F.3d 815 (2011)
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Rule of Law:
Under the Economic Espionage Act, a defendant's intent to benefit a foreign government by possessing trade secrets can be inferred from a long-standing pattern of providing technical information to that government. A 'trade secret' is defined as information the owner has taken reasonable measures to keep secret and which derives independent economic value from not being publicly known.
Facts:
- Dongfan Chung, a naturalized U.S. citizen, began working as an engineer for Rockwell and its successor, Boeing, in 1964.
- Beginning in 1979 and continuing through the 1980s, Chung corresponded with various Chinese officials and provided them with technical information related to U.S. aerospace technology.
- In a 1987 letter, a Chinese official, Gu Weihao, asked Chung for information on the space shuttle and recommended using another engineer, Chi Mak, as a 'safer' channel for passing information.
- In 2002, just before a trip to China, Chung downloaded over 500 sensitive space shuttle specification documents from a restricted Boeing database.
- Within the statute of limitations period (after February 2003), Chung continued to download, organize, and index sensitive Boeing documents on his home computer.
- In 2006, while investigating Chi Mak, federal agents discovered Chung's connections to Chinese officials, his disposal of Boeing documents hidden in newspapers, and a stash of over 300,000 pages of Boeing and Rockwell documents hidden under his house.
- Among the recovered documents, the government identified six that contained trade secrets related to a space shuttle antenna and the Delta IV Rocket.
- Chung told federal agents he took the documents home to write a book and that his supervisor had given him permission to do so.
Procedural Posture:
- A federal grand jury indicted Dongfan Chung on multiple counts, including violations of the Economic Espionage Act.
- Following a bench trial in the U.S. District Court (trial court), Chung was convicted on six counts of economic espionage, one count of conspiracy, one count of acting as an unregistered foreign agent, and one count of making a false statement.
- The district court sentenced Chung to 188 months in prison.
- Chung (appellant) appealed his convictions and sentence to the U.S. Court of Appeals for the Ninth Circuit (intermediate appellate court), arguing primarily that the evidence was insufficient to support the convictions.
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Issue:
Does a defendant's long-standing history of providing technical information to a foreign government, combined with the unauthorized possession of sensitive company documents, constitute sufficient circumstantial evidence to prove the defendant possessed those documents with the intent to benefit that foreign government, as required for a conviction under the Economic Espionage Act?
Opinions:
Majority - Judge Graber
Yes. A defendant's intent to benefit a foreign government under the Economic Espionage Act can be established through sufficient circumstantial evidence. A rational trier of fact can reasonably infer from a defendant's history of passing technical documents to China that the more recent possession of similar documents, including trade secrets, was for the same purpose and with the same intent. The court found ample evidence from the 1980s that Chung intended to benefit China by providing technical information, and his later conduct of downloading, cataloguing, and possessing thousands of sensitive documents—including the six trade secrets—allowed the inference that this intent persisted into the limitations period. The court rejected Chung's explanation that he intended to write a book as not credible, given his history and the nature of the documents.
Analysis:
This decision clarifies the evidentiary standards for prosecutions under the Economic Espionage Act (EEA), particularly regarding the element of intent. It establishes that intent to benefit a foreign government can be proven circumstantially, allowing prosecutors to build a case based on a defendant's historical conduct, even without direct evidence of recent communication or transmission of secrets. The court's detailed analysis of the definition of 'trade secret,' drawing guidance from the Uniform Trade Secrets Act (UTSA), provides a crucial framework for future EEA cases in the Ninth Circuit. This precedent strengthens the government's ability to prosecute economic espionage by allowing fact-finders to connect past actions with current possession of sensitive information to establish criminal intent.
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